P's husband was electrocuted when the boom of a steel crane next to which he was walking came too close to a high-tension electric power line.
P sued for wrongful death in federal court against the Omaha Public Power District (OPPD). Fed jurisdiction was based on diversity.
OPPD filed a third party complaint against Owen (D), saying that Owen's negligence was the proximate cause of Kroger's death.
OPPD moved for summary judgment on P's claim against it, and it was granted.
While summary judgment motion was pending, P was allowed to file an amended complaint naming D as an additional defendant.
Case went to trial between P and D alone.
D said in its answer that it had its principal place of business in NE. On the third day of trial, however, it was revealed that D's principal place of business was in IA, not NE. D moved to dismiss complaint for lack of jurisdiction.
Procedural History
Trial court denied D's motion to dismiss based on lack of jurisdiction. Jury returned a verdict for P.
Ct of appeals affirmed, citing Gibbs "core of operative facts" and the fact that D had concealed IA citizenship from P.
SCOTUS reversed, no jurisdiction over D.
Issues
In an action in which federal jurisdiction is based on diversity, may the P assert a claim against a third-party D when there is no independent basis for federal jurisdiction over that claim?
Holding/Rule
In an action in which federal jurisdiction is based on diversity, the P may not assert a claim against a third-party D when there is no independent basis for federal jurisdiction over that claim unless the third party complaint depends at least in part upon the resolution of the primary lawsuit.
Reasoning
There was no independent basis of fed jurisdiction over P's state law tort action against D, since both are citizens of IA.
Ct of Appeals relied on ancillary jurisdiction, citing Gibbs, but Gibbs was really a case of pendent jurisdiction. In this case, there was no claim based on substantive federal law, but rather state-law tort claims against two different Ds.
The jurisdiction of the federal courts is limited not only by the provisions of Art. III of the Constitution, but also by Acts of Congress. Two cases that show this:
Aldinger v. Howard (1976)- Court held that federal court lacked jurisdiction over a state law claim against a county, even if that claim was alleged to be pendent to one against county officials under 42 U.S.C. §1983.
Zahn v. International Paper (1973)- Court held that in a diversity class action the claim of each member of the plaintiff class must independently satisfy the minimum jurisdictional amt set by §1332(a) and rejected the argument that jurisdiction existed over those claims that involved $10k or less as ancillary to those that involved more.
In each case, despite the fact that federal and nonfederal claims arose from a "common nucleus of operative fact" the Court held that the statute conferring jurisdiction over the federal claim did not allow the exercise of jurisdiction over the non-federal claim.
"Common nucleus of operative fact" test does not end the inquiry. The way the claim is asserted must also be considered as well as the specific statute that confers jurisdiction over the federal claim in order to determine whether "Congress…has expressly or by implication negated" the exercise of jurisdiction over the nonfederal claim.
§1332(a)(1) requires that the civil action must be between citizens of different states and the amt in controversy must be over 10k.
This demonstrates a Congressional mandate that diversity jurisdiction is not to be available when any P is a citizen of the same state as any D.
Complete diversity was destroyed when Owen was brought in.
Under the reasoning of the Ct of Appeals, a P could defeat the statutory requirement of complete diversity by only suing Ds who were of diverse citizenship and waiting for them to implead the non-diverse Ds.
Context must be examined.
This is not really an ancillary claim because the claim is completely separate from P's original claim against OPPD.
Also, P was the one who chose the federal court, and so P shouldn't complain when ancillary jurisdiction does not encompass all of her possible claims since she chose the federal forum and must accept its limitation.
Practical needs which are the basis of ancillary jurisdiction (judicial economy, convenience of litigants) do not suffice to justify extension of the doctrine to a P's cause of action against a citizen of the same State in a diversity suit.
Dissent
The court unnecessarily expands the scope of the complete-diversity requirement while substantially limiting the doctrine of ancillary jurisdiction.
Owen has already been brought into the suit by OPPD, and Kroger is merely seeking to assert against Owen a claim arising out of the same transaction that was already before the court.
Now, P has to bring suit in state court, even though the claim was already before the federal court. This is inefficient and does not take into account considerations of judicial economy, convenience, and fairness to the litigants.
Notes
Crucial difference w/ Gibbs: Kroger was not asserting both her claims against the same party.
